10 Insurance Policies For Retail & Hospitality Business Owners

Posted Mar 9, 2018

When you wrote the business plan for your company, you probably didn’t get too excited at the thought of figuring out which insurance policies you’d need. Or even think about it much at all! Maybe you even thought about skipping the insurance totally. But any seasoned business owner will tell you, it’s better to have insurance and never need it, than not to have it at all.

Can you imagine the financial and legal burdens your business could face without protection? You could even go bankrupt and lose your business entirely.

But, if you take the proper steps to make sure you’re covered, you won’t have to worry.

Here are 10 types of business insurance that make sense for you to explore.

Specific Peril Insurance

This is where natural disasters can be covered. And you actually specify in the policy what is covered — wind, hail or even a riot. But if something else occurs that isn’t in the policy, you’re out of luck. So this type of insurance is for owners who know what their risks are, like someone operating in a flood zone. To be covered for ALL risks, see the next section.

All Risk Insurance

This covers everything from storm damage to smoke damage to theft and beyond. But certain perils may be excluded from such a policy. So be sure to ask your agent if you need this along with the insurance listed above. This is more expensive than specific peril, but offers a more comprehensive coverage.

Business Interruption Insurance

This is a big one for retail businesses. If a disaster or catastrophic event does occur, your business will no doubt suffer from lost income due to your staff’s inability to work in the store. Business interruption insurance compensates a business for its lost income after these types of incidents or even if you were to be sued and unable to remain open for business.

Business Vehicle Insurance

If your company uses its own vehicles, insure those, too. Just like your personal vehicle coverage, this protects you in the event of an accident and will provide a replacement or rental for a loss.

General Liability Insurance

General liability is one of the most important parts of a business owner’s insurance coverage. It offers protection for everything from someone slipping and falling in your store to a patron in your restaurant getting sick and pointing the blame at you. It’s a catch-all for a range of issues you may be confronted with. Remember, this isn’t just for covering medical bills. This insurance can help pay for legal fees if you get taken to court and for any other damages for which your business is found liable.

Liquor Liability Policy

If your restaurant serves alcohol, you’ll want to get a policy so you’re covered if someone is served too much to drink at your establishment and harms another person while driving intoxicated. In most states, this type of policy is mandatory.

Workers’ Compensation

Your business needs to protect itself against something happening to one of your own employees while on the job by having workers’ compensation. This is much more prevalent in a restaurant where someone can easily fall on a wet kitchen floor, but check your state’s requirements for operating a retail store, too, for specific mandates for coverage.

“Once the first employee has been hired, workers’ compensation insurance should be added to a business’s insurance policy,” says entrepreneur.com. “This will cover medical treatment, disability and death benefits in the event an employee is injured or dies as a result of his work with that business.”

Commercial Theft or Crime Insurance

Believe it or not, theft is its own category of insurance. Even though a boutique selling designer clothing or a jewelry shop may seem more prone to theft with its high-ticket items, it can happen at all stores, restaurants, and agencies. So make the investment in theft insurance. Losses due to a crime are not typically covered by commercial property insurance. This coverage includes things like employees stealing from the register, forgery, a burglary, and for the theft of cash and checks. There are even optional add-ons, like coverage if you or your employees are robbed while doing business offsite.